AMC Entertainment Bondholder Deal Will Keep Chain Going Into Spring, Even In Worst-Case Scenario


AMC Entertainment Friday announced a debt restructuring that it said would “prove highly beneficial to the company and its shareholders.”

The deal will reduce the principal amount of its total debt liabilities, extend the maturities of a significant percentage of outstanding debt, reduce cash interest expenses, and boost its cash and liquidity position to help navigate the ongoing COVID-19 crisis, the nation’s largest exhibitor said in an SEC filing.

Theatres have been shuttered since March and the company has been working with its bondholders to restructure its debt, which was high and put the chain in a tough corner as revenue dried up. An initial offer to subordinated debt holders to exchange their notes at a discount was postponed several times as AMC negotiated. It said Friday it had amended the exchange offer with the support of existing subordinated holders representing more than 73% of the notes outstanding. They can swap into a higher class of notes called first lien by a new deadline of July 24.

The company is also selling $200 million in new subordinated notes, which will bring in fresh cash.

Separately, AMC bondholder Silver Lake has agreed to provide $100 million in senior loans, according to a person familiar with the situation.

AMC shares have been gaining this week on anticipation of a deal with bondholders. Shares ended slighly higher Friday but dipped in late trading, down 1.3% to $4.54, after the announcement.


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